Unsecured Lending
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As an unsecured loan is not linked to the equity in your home (in contrast to a secured loan where, if you default on loan repayments, lenders could legally sell your home), it becomes a favourite option for loan seekers. Unlike secured lending, unsecured loans do not require the loan company to secure the debt against your property or any other assets.
Nevertheless, due to the lack of financial security for the loan company, with some unsecured lending, the overall APR charge could be higher than those for secured loans.
Unsecured loan products are considered more appropriate for those who are more conservative in their borrowing - normally an unsecured loan could amount to £25,000, but the individual lender will set limits to the amount of the loan at their own discretion.
They can be applied towards any of the things secured loans might be used for (with some restrictions) and you can decide on the amount of time you need to repay the loan. Usually, the period to pay back the loan will be quite flexible, between 6 -120 months, so it is important to carefully estimate first to see how much you can comfortably afford to repay every month.
Since the lending criterias are different when applying for an unsecured loan as opposed to a secured loan, you may find it harder to get an unsecured loan. However, in the majority of circumstances, there are sympathetic unsecured lenders who will assist you in your efforts to acquire an unsecured loan.
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